Forest Oil Corp. (FST:US), the Denver-based oil and natural-gas producer, fell to the lowest in more than 13 years after the company forecast lower production and cut capital expenditure estimates for the second half of this year.
Forest plunged (FST:US) 9.8 percent to $6.15 at the close in New York, the lowest since Feb. 26, 1999.
Second-half gas volumes are expected to drop by as much as 6 percent from about 229 million cubic feet a day in the first half of this year, the company said in a statement yesterday. Capital expenditures are estimated to be between $190 million and $210 million, down from about $435 million.
“Adjusting the capital spending rate is the first step in improving the company’s financial strength and flexibility,” interim Chief Executive Officer Patrick McDonald said in the statement.
Scott Hanold, an analyst at RBC Capital Markets in Minneapolis, cut the stock’s rating to sector perform, or hold, and halved his expected price to $8 following Forest’s announcement.
Forest plans to shift drilling rigs to the Eagle Ford shale in Texas from East Texas and the Panhandle, the company said. It has developed a “go-it-alone plan” for 40,000 acres in the Eagle Ford, while it continues discussions with potential joint- venture partners, according to the statement.
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